Financial Analysis

"Commitments and Contingencies Legal Proceedings From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include actions relating to employment law and misclassification of agents as independent contractors, intellectual property, commercial or contractual claims, brokerage or real estate disputes, or other consumer protection statutes, ordinary-course brokerage disputes like the failure to disclose property defects, commission disputes, and various liabilities based upon conduct of individuals or entities, including agents and third-party contractor agents. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In September 2024, Fathom Realty, a wholly-owned subsidiary of the Company, reached a nationwide settlement related to claims asserted in Burnett v. The National Association of Realtors, et al. As part of the settlement, Fathom Realty paid $0.5 million into a settlement fund on October 1, 2025, $0.5 million on January 2, 2026, and is obligated to pay an additional $1.95 million on or before October 1, 2026, which the Company has included in other short-term liabilities in its balance sheet as of March 31, 2026. Fathom Realty has also agreed to adhere to the rule changes put forth by the NAR. As previously reported in a Current Report on Form 8-K filed on November 28, 2 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Debt Total debt consisted of the following (amounts in thousands): March 31, 2026 December 31, 2025 3.75% Small Business Administration installment loan due May 2050 $ 100 $ 102 Convertible note payable 5,000 5,000 Promissory note payable 13 53 Bridge note 2,007 Director and officer (D&O) insurance policy promissory note 1 26 102 Executive and officer (E&O) insurance policy promissory note 2 205 329 Total debt 7,351 5,586 Long-term debt, current portion (5,266) (5,506) Long-term debt, net of current portion $ 2,085 $ 80 (1) The 2025 D&O note carries a 7.80% interest rate and is payable quarterly with the last quarterly payment due in June 2026. (2) The 2025 E&O note carries a 12.25% interest rate and is payable monthly with the last monthly payment due in August 2026. Promissory Note In connection with the acquisition of My Home Group (MHG) in November 2024, the Company assumed a promissory note with a principal balance of $0.2 million, bearing an annual interest rate of 8.5%. The note was payable in 20 equal monthly installments of $13,413, with the final payment being made in April 2026. Bridge Note In March 2026, the Company entered into a subordinated secured promissory note in the original principal amount of $2.0 million (the Original Bridge Note) with Bed Bath & Beyond, Inc. (the Investor). In connection with the Original Bridge Note, on March 18, 2026, the Company, the Material Subsidiaries (as defined in the Original Bridge Note), and the Investo …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Stock-based Compensation The Companys 2019 Omnibus Stock Incentive Plan (the 2019 Plan) provides for granting stock options, restricted stock awards, and restricted stock units to employees, directors, contractors and consultants of the Company. On August 9, 2024, the Company's shareholders approved an amendment to the 2019 Plan that increased the share reserve of the 2019 Plan by 1,600,000 shares from 5,760,778 shares to 7,360,778 shares. On August 20, 2025, the Company's shareholders approved an amendment to the 2019 Plan that increased the share reserve of the 2019 Plan by 1,300,000 shares from 7,360,778 to 8,660,778 shares. Restricted Stock Awards The following is the restricted stock award activity for the three months ended March 31, 2026: Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2025 134,581 $ 2.88 Granted Vested (34,375) 3.67 Forfeited Nonvested at March 31, 2026 100,206 $ 2.61 Restricted Stock Unit Awards During 2025, the Company commenced granting restricted stock units to employees and agents. The following is the restricted stock unit award activity for the three months ended March 31, 2026: Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2025 2,048,090 $ 1.36 Granted 619,187 0.93 Vested (608,011) 1.35 Forfeited (10,273) 1.94 Nonvested at March 31, 2026 2,048,993 $ 1.23 Stock Option Awards The Company did not grant stock option awards during the three month period ended March 31, 2026. Stock-based Compensation …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements ASC Topic 820, Fair Value Measurement (ASC 820), defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). Level 3 inputs are unobservable inputs that reflect the entitys own assumptions in pricing the asset or liability (used when little or no market data is available). A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. In general, fair value is based upon quoted market prices, where evaluated. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inpu …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Income Taxes In determining the quarterly provision for income taxes, the Company used the annual effective tax rate applied to year-to-date income. The Companys annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes, permanent differences, and changes in the Companys valuation allowance. The income tax effects of unusual or infrequent items including a change in the valuation allowance as a result of a change in judgment regarding the realizability of deferred tax assets are excluded from the estimated annual effective tax rate and are required to be discretely recognized in the interim period they occur. The Company has historically maintained a valuation allowance against deferred tax assets and reported only minimal current state tax expense. For each of the three months ended March 31, 2026 and March 31, 2025, the Company recorded income tax expense of approximately $0.02 million. The Company expects to maintain a valuation allowance on current year remaining net deferred tax assets by year-end due to historical operating losses, but records a net deferred tax liability when reversals of deferred tax liabilities that relate to indefinite-live intangible assets may not be used in realizing deferred tax assets. The Company applies the standards on uncertainty in income taxes contained in ASC Topic 740, Accounting for Income Taxes. The application of this interpretation did not have any impact on the Companys condensed cons …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Operating Leases The Company has operating leases primarily consisting of office space with remaining lease terms of less than one year to five years, subject to certain renewal options as applicable. Leases with an initial term of twelve months or fewer are not recorded on the balance sheet, and the Company does not separate lease and non-lease components of contracts. There are no material residual guarantees associated with any of the Companys leases, and there are no significant restrictions or covenants included in the Companys lease agreements. Certain leases include variable payments related to common area maintenance and property taxes, which are billed by the landlord, as is customary with these types of charges for office space. Our lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings to derive an imputed rate, which was used in a portfolio approach to discount its real estate lease liabilities. The Company used estimated incremental borrowing rates for all active leases. The table below presents certain information related to lease costs for the Companys operating leases (amounts in thousands): Three Months Ended March 31, 2026 2025 Operating lease expense $ 376 $ 357 Short-term lease expense 153 144 Total lease cost $ 529 $ 501 The following table presents the weigh …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recent Upcoming Accounting Pronouncements In November 2024, the FASB issued Accounting Standards Update ASU 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosure (Subtopic 220-40) (""ASU 2024-03""). ASU 2024-03 requires the disclosure of specified information about certain costs and expenses in the notes to the financial statements. Per the amendment, for each interim and annual reporting period, the reporting entity must 1) disclose the amounts of (i) purchases of inventory, (ii) employee compensation, (iii) depreciation, (iv) intangible asset amortization and (v) depreciation, depletion, and amortization recognized as part of oil-and-gas producing activities; 2) include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements; 3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and 4) disclose the total amount of selling expenses and, in annual reporting periods, an entitys definition of selling expenses. This amendment is effective for all annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the effect ASU 2024-03 will have on its disclosures. In September 2025, the FASB issued Accounting Standards Update ASU 2025-06 - Intangibles - Goodwill and Other - Internal-Use …

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Related Party Transactions In May 2026, the Company and the Holders of the 2024 Notes entered into the Waiver, as discussed in more detail in Note 8 above. Scott Flanders, the chairman of the Companys Board, was a party to the Waiver. As required by the Companys internal policies, this related-party transaction was approved by a majority of the independent, disinterested members of the Companys Board. In March 2025, the Company completed the March 2025 Offering, which resulted in the issuance and sale by the Company of 3,505,364 shares of common stock at an offering price of $0.68 per share and 832,639 shares of common stock at an offering price of $0.72 per share, generating gross proceeds of $3.0 million, of which the Company received total net proceeds of $2.9 million, after deducting underwriting discounts and other offering costs. The Company issued and sold shares of its common stock to certain investors and members of the Companys Board. The Company leases office from entities affiliated with certain of its employees. Rent expense was $0.03 million for each of the three months ended March 31, 2026 and 2025 . The Company received marketing services from entities affiliated with certain of its employees. Marketing expense was $0.01 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

"Segment Reporting The Company's Chief Operating Decision Maker (""CODM"") is its Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period. Our CODM makes operating decisions and assesses performance based on the services of identified operating segments and has identified three operating and reportable segments: Real Estate Brokerage; Mortgage; and Title. Through its Real Estate Brokerage segment, the Company provides real estate brokerage services. Through its Mortgage segment, the Company provides residential loan origination and underwriting services. Through its Title segment, the Company provides title insurance, escrow, and settlement services to facilitate residential real estate transactions. Beginning in the fourth quarter of 2025, the Company determined that its Title operations meet the quantitative thresholds under ASC Topic 280, Segment Reporting, to be presented as a reportable segment. Following the sale of LiveBy in November 2025, the Company no l …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Shareholders Equity On March 10, 2022, the Companys Board of Directors authorized an expenditure of up to $10.0 million for the repurchase of shares of the Companys common stock. The share repurchase program does not have a fixed expiration. Under the program, repurchases can be made from time-to-time using a variety of methods, including open market transactions, privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act). The actual timing and amount of future repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. The repurchase program does not obligate the Company to acquire any particular number of shares and may be suspended or discontinued at any time at the Companys discretion. There were no equity repurchases during the three months ended March 31, 2026 and the full year ended December 31, 2025, leaving approximately $4.0 million remaining under the share repurchase authorization. In March 2025, the Company completed the March 2025 Offering, which resulted in the issuance and sale by the Company of 3,505,364 shares of common stock at an offering price of $0.68 per share and 832,639 shares of common stock at an offering price of $0.72 per share, generating gross proceeds of $3.0 million, of which the Company received total n …

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Subsequent Events On June 16, 2026, the Company entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement) with Bed Bath & Beyond, Inc., a Delaware corporation (BBBY) and Fathom Merger Sub, Inc., a North Carolina corporation and a wholly-owned subsidiary of BBBY (Merger Sub). The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of BBBY (the Merger). The Merger is expected to close in the second half of the year. For additional detail, see the Companys Current Report on Form 8-K filed with the SEC on June 17, 2026. On June 30, 2026, the Company entered into an amendment to the Equity Purchase Agreement, dated May 3, 2024, pursuant to which the Company sold Dagley Insurance Agency LLC to Nathan Dagely, to, among other things, defer certain payments to the Company (the EPA Amendment). For more information, see the Companys Current Report on Form 8-K filed with the SEC on July 6, 2026. The Company has evaluated subsequent events through the date these financial statements were issued and has determined that, other than the Amended and Restated Bridge Note and the Waiver, as described in more detail in Note 8, and the Merger Agreement and the EPA Amendment, there were no events or transactions occurring during this period that would require recognition or disclosure in the condensed c …

SubsequentEventsTextBlock · excerpt; the full note is in the filing